Of Canada’s publicly traded media companies, Toronto-based Corus is one of the more familiar among U.S.-based radio and television broadcasters, media brokers and Wall Street investors. Its AMs and FMs include heritage brands such as CFNY-FM “The Edge” and CILQ “Q107” in Canada’s largest market, while its TV entities are comprised of the Global broadcast network and a variety of cable TV channels.
Media industry consolidation in Canada, coupled with digital dollar growth, hasn’t been kind to Corus. While President/CEO Doug Murphy was pleased with a recovery in the company’s radio business in its fiscal Q2 2022, other factors contributed to “a challenging macroeconomic environment.”
And, the Radio numbers are coming off of some rather difficult year-over-year comps.
“Corus has delivered modest consolidated revenue growth,” Murphy said in prepared comments ahead of the TSX opening bell in Toronto on Friday. He spoke positively about strong subscriber revenue gains, while concurrently noting that these gains were offset “by lower timing-related content licensing revenues.”
AM, FM UPWARD
So, how did the Loonies and Toonies appear on the P&L sheet for Corus?
Revenue for Radio was up, rising to $22 million CDN from $20.36 million CDN in fiscal Q2 2021. But, Radio segment profit margin tumbled by 91%, to $125,000 CDN from $1.41 million CDN. What happened? First, it is important to note that fiscal Q2 2021 included a Canada Emergency Wage Subsidy infusion. Subtract this from the numbers, and Radio revenue was off from $700,000 CDN. Still, the dip is notable as much of Canada has finally reopened from nearly two years of tough pandemic-related restrictions — with Calgary particularly challenged. Here, Corus owns heritage News/Talk CHQR-AM 770, CHRY “Country 105” and CFGQ “Q107,” a Classic Rocker that shares branding with CILQ in Toronto.
There’s another important factor to consider, however. In fiscal Q2 2021, segment profit included relief on regulatory fees. As a result, CRTC part I and II fees have increased.
FLAT TV PERFORMANCE
Here, the segment loss seen for TV was also impacted by the regulatory fee relief and Canada Emergency Wage Subsidy. As such, the 22% year-over-year segment profit decline is likely unfair to look at as a fair gauge of where Global and Corus’ television segment are, fiscally.
The answer? Flat performance is being seen at Corus Television, with revenue moving to $339.67 million CDN from $338.52 million CDN.
Put it all together, and Corus’ consolidated revenue improved by 1%, to $361.67 million from $358.88 million. Net income attributable to shareholders declined by 54%, to $16.22 million ($0.08 per share) from $35.3 million ($0.17).
What’s the other big takeway from Corus’ fiscal Q2 ’22 results? Advertising dollar growth is statistically flat on a consolidated basis, at $205.54 million. Subscriber revenue — a.k.a. the retransmission consent fees it gets from Canadian MVPDs — are a faster revenue growth component.
At 10:10am Eastern, Corus’ publicly traded B Class shares were down 3.8% to $4.56. At the Closing Bell, a $4.63 close was logged. That’s a new year-to-date low, and puts Corus on track toward a previous 52-week low of $4.46 seen on December 13. On a five-year trend, the dip is more pronounced, with CJR-B trading in the mid-$13 range during Spring 2017. In fact, a RBR+TVBR analysis shows Corus shares at their lowest price since October 1999.
Nevertheless, Corus’ Board of Directors is awarding shareholders for their loyalty by offering a $0.06 CDN per share dividend for holders of its B class shares.
Those with Class A shares will receive a slightly lower $0.05875 per share dividend.
Each dividend is payable on June 30 to shareholders of record at the close of business on June 15.
There were 3,373,726 Class A Voting Shares and 203,398,732 Class B Non-Voting Shares outstanding on March 31, 2022.
